Email FacebookTwitterMenu burgerClose thin

5 Questions to Ask a Financial Advisor in a First Meeting


Getting your finances in order can be challenging, so people often turn to financial advisors. But selecting a financial advisor whose training, experience and personality fit your preferences can be a difficult task. Here are five questions you should ask in a first meeting. And even if this kind of a vetting process take a little time, there are multiple reasons to follow through with finding a financial advisor, not just for investment advice but also for estate planning and retirement planning – among other challenges.

To simplify the process of choosing a financial advisor, it helps to ask the right questions. Here are five questions to ask financial advisor candidates in a first meeting to help determine whether they are a good fit for your financial needs.

1. What Are Your Credentials, Licenses, Certifications?

Before working with a financial advisor, ask them what specific qualifications they have. This will help you gauge not only their knowledge but also their commitment to learning more and improving.

You can also ask if they have a particular strategy, such as investment management, retirement planning or tax strategies. Keep in mind that anyone who provides investment advice is required to register with the SEC. If they say they focus on investment management, you can verify their information with the SEC’s Investment Advisor Public Disclosure.

2. How Much Experience Do You Have?

If a financial advisor is new to the field, they likely won’t have much experience. We all start somewhere, but the reality is that you might strongly prefer someone who has 25 years of experience versus one year of experience.

Think about investing, which doesn’t often change much from one year to the next. Of course, innovations have changed people’s calculations to some degree, such as cryptocurrency and fractional shares. Overall, though, investing strategies mostly stay the same over time.

3. Are You a Fiduciary?

You might think that if you go to someone for financial advice, they will always have your best interest in mind. But that isn’t always the case. You should look for a fiduciary financial advisor, as these advisors have committed to always act in the best interests of their clients.

Generally, a fiduciary financial advisor won’t follow the suitability standard, which only requires financial advisors to make suitable recommendations for their clients. But many choices can be suitable but not necessarily the best choice.

For instance, a financial advisor who follows the suitability standard could recommend an investment that may be good enough. Still, it also has high fees that benefit the advisor or their firm. A fiduciary financial advisor would simply make the best recommendation for you rather than one that may also benefit them financially.

Fiduciary financial advisors must also disclose any conflicts of interest that may arise. Thus, even if they did recommend one of those high-fee funds, they would be required to tell you that their firm may benefit.

4. What Is Your Fee Structure?

All financial advisors must make money, but how they get paid can make a difference. They make money usually through flat rates, hourly rates, assets under management (AUM) or commissions. Here is a brief overview of each:

  • Flat rate: Financial advisors often pay a flat rate for a one-time consultation, such as working with you to create a financial plan.
  • Hourly rate: Some financial advisors have a specific rate they charge for every hour of their time.
  • AUM: Some financial advisors charge clients a percentage of the assets that they manage for clients. For example, if you invest $100,000 with them and they have a 0.50% fee, they will charge you $500.
  • Commissions: Financial advisors can sometimes receive commissions for selling certain products like mutual funds, annuities and life insurance.

Financial advisors sometimes use a combination of fee structures depending on the scenario. Often, you will see fiduciaries refer to themselves as “fee-only” financial advisors. However, it is also possible for them to earn commissions in some cases.

5. What Is Your Investment Philosophy?

If you are asking your advisor for investment advice, you should be sure you are on the same page as them. There are several things you might want to consider, such as:

  • Does their strategy align with your risk tolerance?
  • Do they lean toward a value-oriented or growth-oriented investing style?
  • Is your portfolio adequately diversified?
  • What role does technical analysis play in your selection of securities? What technical metrics are most important to you?
  • Are costs and tax implications minimal?

Another thing you may want to think about is your values. While not an issue for all investors, if values-based investing is important to you, you will want a financial advisor who aligns with those values.

Bottom Line

SmartAsset: 5 Questions to Ask a Financial Advisor in a First Meeting

Getting on track financially can be difficult and the same can be true for finding a financial advisor. But if you ask the right questions, you can make the process easier. Ask about their qualifications, if they are a fiduciary and how they make money. Also, make sure their strategy aligns with yours.

Tips for Finding a Financial Advisor

  • A financial advisor can help you set and reach financial planning goals. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Your financial goals should likely include retirement savings. However, figuring out where you stand with your retirement savings can be tough. SmartAsset’s retirement calculator can help you estimate what your retirement income will look like.

Photo credit: ©, ©